Stocks steam ahead as cyclical again steals spotlight

Stocks extended gains on Tuesday under the lead of cement, steel and auto shares, banking on the revival of economic activities and government's efforts to meet FATF targets, amid encouraging economic numbers, dealers said.

Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 1.23 percent or 490.22 points to close at 40,292.82 points, while KSE-30 was up 1.22 percent or 210.51 points to end at 17,439.80 points.

Ahsan Mehanti, senior analyst at Arif Habib Corporation, said, “Bullish activity was witnessed at PSX amid a bull-run in global equities and surge in global crude oil prices”.

Upbeat economic data on $424 million current account surplus in July, finance minister’s affirmation on stronger Pakistan-Saudi ties with no compulsion of loan repayments, CCoP approval for head start over privatisation of PPL, OGDCL, and PRC, and reports of substantial gas discovery by OGDCL, MARI in Kohat led to a rally in the futures rollover week, Mehanti added.

Of 402 active scrips, 278 were up, 104 retreated, and 20 remained unchanged. Volumes jumped to 535.068 million shares, compared with 371.723 million in the previous session.

Tahir Abbas, director research at Arif Habib Limited, said, “The market landed in the positive zone on back of fresh buying in cement, steel and textile companies”.

Steel and cement shares were up on back on expectation that following the end of downpour in Sindh, including Karachi, construction and repair works would increase the demand, he added.

“While textile shares rallied on reports that export numbers for July have been better with August and exports are likely to maintain growth,” Abbas said.

Salman Ahmad, head of institutional sales at Aba Ali Habib Securities, said "The current account surplus helped boost sentiment which were well-supported by the market talk that the opening of the economy domestic and international would improve manufacturing sector”.

Ahmed said another factor that boosted volumes were reports that both government and opposition were on the same page to fulfill the conditions of FATF. “Laws have been discussed and aggressive efforts are underway to document the economy and do away with obstacles to get remove from the grey list,” Ahmad added.

Muhammad Saeed Khalid, head of research at Shajar Capital said, “KSE-100 index remained bullish during the session”.

The benchmark index showed positive returns in the OMCs, refineries, cements and steel sectors where investors bought intensively reacting to Saudi Arabia’s positive response on the deferred payment facility on oil supply.

"Further, as the monsoon rains wreaked havoc on the country, the demand for cements and steel has induced investors to show overweight stance in the construction sectors,” Khalid added.

The top gainers were Rafhan Maize, gaining Rs200 to close at Rs8,200/share, and Colgate Palmolive, up Rs179.99 to finish at Rs2,579.98/share, while Phillip Morris Pakistan, down Rs45 to close at Rs1,610/share, and Ismail Industries, losing Rs18.99 to close at Rs301.01/share, were the main losers.

Hascol Petrol posted the highest volumes with 50.392 million shares and gained Rs0.90 to end at Rs16.96/share, whereas Pakistan International Bulk turnover recorded the lowest with 12.915 million shares, whereas the scrip gained Rs0.07 to end at Rs12.39/share.